Canada: More Rapeseed Processing Capacity Comes
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Canada produced 18 percent of global Canola seeds, a reduction from the five-year average (2016 to 2020) of 28 percent, and is on track to provide nearly 40 percent of exportable supply (forecasted), down from the five-year average of 64 percent. Several farmers and agronomists commented that wildfire smoke from British Columbia may have protected prairie crops from high ultraviolet rays and heat stress during the scorching hot summer of 2021. The smoke may have helped reduce bud-blasting (aborted flowers), which can improve yield. Smoke can also have the effect of slowing down crop maturity. The complex impact of wildfire smoke on different stages of Canola development is being researched by seed companies and academics.
During MY 2021/22, production fell 35 percent, despite an 8 percent increase in the area planted. Severe drought in Canola-growing regions of the prairies reduced the average yield to a rate not seen since the prairie drought of 2002. Although low yielding, the quality in most areas was high. However, oil content is below average, and the national average extraction rate has fallen.
Exports are forecast to nearly double on strong world demand and a rebuilding of exportable supplies, assuming a return to typical yields. The accuracy of the MY 2022/23 forecast depends on the production success of the 2022 Canola crop, world production of oilseed crops, and any additional agricultural export bans. This forecast assumes that sunflower production in Ukraine in MY 2022/23 will be lower due to either no or minimal planting because of the ongoing conflict there. Looking ahead to MY 2023/24, more seed is expected to remain in Canada to be processed as additional processing capacity comes online, reducing seed exports.
According to the AgFlow data, China led their export market with 0.4 million tons of Rapeseed in January, followed by Mexico (0.1 million tons), Saudi Arabia (60,000 tons), and Japan (40,500 tons). Canada shipped 3.75 million tons of Rapeseed last year. MY 2022/23 ending stocks are forecast to remain well below the five-year average on strong global demand despite higher, but unrecovered, production levels. MY 2021/22 ending stocks are forecast to reach only 15 percent of the five-year average because of a smaller crop and strong global demand.
Inputs Access for Rapeseed Cultivation in Canada
Several supply chain issues will challenge farmers’ ability to access fertilizer and other inputs and elevate risk to MY 2022/23 Canola crop yield and quality. According to industry, rail is the dominant mode of fertilizer transportation, representing approximately 75 percent of all fertilizer produced and used in Canada and 90-95 percent of the annual ton-kms (i.e., the distance traveled by rail is more significant than a truck). It is unlikely that a substantial amount of fertilizer will be moved by truck, partly because trucking fleets are already stretched thin. Approximately 10 to 15 percent of CP’s (Canadian Pacific Rail) business is fertilizer.
Potash, nitrogen (mainly in the form of urea), and phosphorus are the primary nutrients in commercial fertilizers. Current export bans include China’s export ban on phosphate, which began in September 2021, and Russia’s export ban on nitrogen. Russia is the world’s largest nitrogen exporter. Canada is the world’s largest producer of potash, followed by Russia. Fertilizer companies supplying the prairies typically source nitrogen from Canada and the United States, while eastern companies previously sourced over 90 percent of their nitrogen from Russia.
Canola (like all oilseeds grown in Canada) is particularly vulnerable to nitrogen supply shortages. A high-yielding Canola crop in Canada’s prairies requires a significant amount of nitrogen (N) – up to 2.9 to 3.5 lbs. per bushel – while cereal alternatives like spring wheat, barley, and oats require between 0.96 to 2.3 lbs. per bushel, according to data published in 2001 by Manitoba Agriculture, Food and Rural Initiatives. Pulses, another crop alternative to Canola, also require significant amounts of nitrogen.
Other sources: USDA
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